The General Electric Co. was approved Tuesday for state tax credits valued at more than $51 million over 15 years to open a shared services center employing approximately 2,000 workers in greater Cincinnati.
Fairfield, Conn.-based General Electric in April announced plans to open a U.S. Global Operations Center in 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.
GE was among several business projects approved Tuesday for Ohio Job Creation Tax Credits by the Ohio Tax Credit Authority. The authority is comprised of business leaders and the director of Ohio Development Services Agency. GE will receive an 85 percent, 15-year tax credit in exchange for the creation of $111 million in new annual payroll by the end of 2017.
To receive the state tax credits, GE has to meet benchmarks for hiring and payroll. Also, as part of the agreement, the authority requires the company to maintain operations at the project location to be determined for at least 18 years.
“The Job Creation Tax Credit is a performance-based credit. So, the actual value of the tax credit is based on jobs created and new payroll tax generated, as verified,” said Stephanie Gostomski, spokeswoman for Ohio Development Services Agency, in an email.
If GE meets commitments, the state government incentives are valued to be worth $51,657,852, according to Gostomski. More information about whether this was the state’s largest dollar-value tax abatement awarded to a company was not immediately available.
“This GE project is one of the largest job-creating projects that the Ohio Tax Credit Authority has ever approved,” she said.
The total package of financial incentives to lure the multi-national conglomerate promises to be lucrative.
The state tax credits awarded are in addition to incentives the company will receive from local governments in the community where the center will be built, and from JobsOhio, the state private development agency which can offer incentives of its own.
GE has yet to announce its final site selection within the Cincinnati market to open its corporate services center.
The project was compared to Ohio winning a Fortune 500 headquarters, as the new service center will create 1,400 new jobs in the state. Some 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.
“They’re going to be hiring people hand over fist,” said Clif Morehead, GE’s regional manager for government affairs and policy, at Tuesday’s tax credit authority meeting. GE picked the Cincinnati area because of its workforce pool and attractive amenities, he said.
Morehead said the hiring will be a mix of new college graduates and mid-career professionals.
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.
Staff Writer Laura Bischoff contributed to this report.
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