CINCINNATI - Taxpayers will pay a premium to bring General Electric’s Global Services Center to the Cincinnati riverfront, including a substantial parking discount for G.E. workers and a hefty property tax break for its new office building at The Banks, sources told WCPO.
Terms of the deal have yet to be announced, but G.E. is expected on Monday to ask Cincinnati City Council and the Hamilton County Commissioners to improve local incentives for the deal, said sources with knowledge of discussions of the deal.
Cincinnati and Hamilton County will contribute extra incentives because the cost of building at The Banks is estimated to be at least 15 percent more expensive than alternate sites in Oakley and Mason, the sources said.
The deal is expected to mirror the $51.6 million job creation tax credit that the state of Ohio offered to bring 1,400 new jobs to the Cincinnati region, the sources said. G.E. has said it expects those jobs to generate $111 million in payroll. Ohio will reimburse the company for 85 percent of the income taxes paid by those employees over 15 years.
Cincinnati made a similar deal with Dunnhumby USA, which is building a new headquarters at the corner of Fifth and Race streets. Dunnhumby got a 75 percent reimbursement for 10 years. If G.E. gets the same terms as Dunnhumby, its Cincinnati Property Investment Reimbursement Incentive would be worth about $17.5 million.
Beyond that, sources said Hamilton County is offering discounts of 30 to 50 percent on monthly parking fees for G.E. employees. Although its state incentives are based on bringing 1,400 new jobs to Ohio, G.E. is actually planning to house more than 2,000 employees at the site. Assuming a 40 percent price break for those 2,000 employees on the quoted rate of $100 a month for The Banks parking garage, the parking perk would be worth about $1 million a year.
Property tax abatements could also be part of the mix, according to sources. Although it’s not clear how much the county would be able to offer without causing shortfalls in the fund that covers debt service for riverfront development.
The prospect of paying a premium to bring G.E. to The Banks is just fine with the city’s top business leaders. Sources say Reds owner Bob Castellini actively promoted the riverfront site, at one point directly lobbying G.E.’s Cincinnati-native CEO, Jeffrey Immelt, to endorse the idea.
Castellini did not respond to a request for an interview Thursday.
“We have invested, publicly and privately, huge money to make The Banks a great place in our city,” said Tom Williams, co-owner of the Reds and president of North American Properties. “It desperately needs people down there around the clock. It’s hanging in there but needs a big jolt of workers and another jolt of dwellers. Game days and weekend nights are not enough.”
Economic development consultant Doug Moormann said the central riverfront will be a stronger location for G.E.
“The ability to attract a well-qualified, professional work force is unmatched when you look at the environment that’s offered at the Banks,” said Moormann, vice president at downtown-based Government Strategies Group. “It’s new. It’s vibrant … it offers a variety of unique attributes, not the lease of which is putting a GE sign on a skyline that’s frequently featured in national broadcasts of Major League Baseball and National Football League games.”
University of Cincinnati Professor Shaun Bond said G.E.’s decision could help the riverfront project attract a hotel. It’s long been part of the plan, but multiple attempts to attract hotel partners have so far fallen short.
“That’s the advantage, the terrific feature of these mixed-use developments that combine the retail and residential and office space. You get tremendous synergies that arise from that environment,” said Bond, director of the University of Cincinnati's Real Estate Center and professor in the finance department at UC’s College of Business.